June 12, 2013 Comments

The S&P 500 was down 0.8% today and Toronto was down 0.9%.

Almost all of our stocks picks were down today with the Market.

I am fairly certain that Melcor went ex-dividend today meaning that if you bought yesterday you would get the 75 cent dividend on June 28 and if you bought today you don’t. So in theory, all else equal,  the stock should have declined 75 cents today. It was basically unchanged despite the down market. Possibly that is due to its being so thinly traded and not enough people realize it was ex-dividend today. Ooops ignore what is in yellow, Yahoo finance mis-led me.  Correction, it did fall 79 cents today so pretty much as the theory said it would. But this may be a buying opportunity as all else equal I expect it will creep back up. The 75 cents they are paying out does reduce the book value. But it will have only a tiny impact on earnings… But maybe this dip with the dividend just shows how dumb it is for people to always think dividends are so great. It’s our OWN money they are paying out and money paid out does not compound and grow. Which is precisely why Warren Buffett never paid out a dividend at Berkshire going back to 1965. (Actually that is a lie, ironically enough he paid out exactly one thin dime per share in 1969 and never another dime)


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